Being one of the most important financial hubs in the world, Luxembourg has taken decisive measures to enhance the competitiveness of its investment fund sector. Recognizing the evolving needs of the investment industry and the importance of remaining at the forefront of innovation, Luxembourg has recently amended several key laws governing its financial sector.

In a bid to create an even more attractive environment for investors as well as fund managers, Luxembourg has revised the following laws:

• the Law of 17 December 2010 on undertakings for collective investments (the UCIs Law),
• the Law of 15 June 2004 on investment companies in risk capital (the SICAR Law),
• the Law of 13 February 2007 on specialized investment funds (the SIF Law),
• the Law of 12 July 2013 on alternative investment fund managers (the AIFM Law)
• the Law of 23 July 2016 on reserved alternative investment funds (the RAIF Law).

Conscious about its value also for the financing of infrastructure, that will be vitally important for the transition to more sustainable and resilient economies, these amendments reflect the country's commitment to nurturing a business-friendly ecosystem that supports the growth and competitiveness of its fund center. By streamlining and modernizing the regulatory framework, Luxembourg aims to attract new investors, facilitate capital flows, and foster the development of innovative investment strategies. Furthermore,

The key take-away of changes to the above-mentioned laws can be summarized as follows:

Here are the summarized key points from the provided text:

• Harmonization of the definition of "well-informed investor" in the SIF, SICAR, and RAIF Laws. The minimum investment threshold will be lowered to EUR 100,000 to facilitate capital raising from non-professional investors.
• Extension of the capital-raising period for SICARs, SIFs, RAIFs, and UCIs Laws. The period will be increased from 12 to 24 months for SICARs, SIFs, and RAIFs, and from 6 to 12 months for Part II funds.
• Introduction of alternative corporate forms for SICAVs under Part II of the UCIs Law, such as the corporate partnership limited by shares (SCA), the common limited partnership (SCS), or the special limited partnership (SCSp).
• AIFMs can now have tied agents, subject to the same obligations as credit institutions and investment firms. Definitions within the AIFM Law will also be clarified.
• Clarification of the consequences of not appointing a new depositary within the notice period in the SICAR, SIF, and UCIs Laws. The CSSF will remove funds from the official list if a new depositary is not appointed
• Extension of the non-judiciary liquidation regime to AIFMs: Liquidators must be approved by the CSSF, and the decision to liquidate can only be made once all management activities have ceased.
• Modernization of the subscription tax regime to support the development of new European products like ELTIFs and PEPP. Exemptions from subscription tax will be provided for SIFs, RAIFs, and Part II funds structured as ELTIFs or PEPPs. Clarifications and alignment of subscription tax exemptions for funds of funds and money market funds will also be made.

As the global financial landscape continues to evolve, Luxembourg remains committed to adapting and anticipating the needs of investors, fund managers, and industry stakeholders. These legislative amendments mark an important step towards a more competitive and forward-looking fund industry, ensuring that Luxembourg remains a preferred choice for global investment endeavors.

We at beonti understand ourselves as your guide to Luxembourg. If before of finally now you are thinking about setting up a fund or an entity in Luxembourg, contact us! We can facilitate your access to Luxembourg and link you to the right parties appropriate to the size of your envisaged structure. For further information, check our corporate scaling or family office & asset management services.